Senate Backs Internet Gambling Ban

CASSANDRA BURRELLJuly 23, 1998

WASHINGTON (AP) _ The Senate voted overwhelmingly Thursday to try to shut down the billion-dollar Internet gambling industry, calling it addictive, a corrupting influence on the young and a source of crime growing out of control.

Senators voted 90-10 to ban all forms of gambling on the Internet, including the interactive, pay-to-play casino-style games offered by an estimated 140 sites on the World Wide Web. Most are operated by businesses based overseas.

``More than a billion dollars will be gambled over the Internet this year,″ said Sen. Jon Kyl, R-Ariz., the provision’s lead sponsor. ``Internet gambling is unregulated, accessible by minors, addictive, subject to abuse for fraudulent purposes like money laundering, evasive of state gambling laws _ and already illegal at the federal level in many cases.″

The measure would extend to the Internet _ and to new technologies involving microwave transmission and fiberoptic cable _ the current federal ban on interstate gambling on sports by telephone or wire.

It was included as an amendment to a $33.2 billion spending bill covering the Commerce, Justice and State departments in fiscal 1999, starting Oct. 1. The Senate passed the overall spending bill on a 99-0 vote. In the House, neither the spending bill nor an Internet gambling ban measure has reached the floor.

The Senate amendment would require Internet service providers to ``pull the plug″ on those sites, Kyl said, saying a ban would ``likely be enforced by law enforcement identifying a Web site that provides illegal gambling and seeking a court order enjoining the activity.″

During two days of debate on the Senate floor, the gambling amendment’s supporters contended a ban is needed since there is no way to regulate virtual casinos. Unscrupulous operators are free to rig their games to cheat customers or accept bets from children who get their hands on parents’ credit cards, they said. States regulate gambling within their boundaries but have no control over online gambling activity, including states where residents have declined to legalize games of chance.

But Internet gambling spokeswoman Sue Schneider said other countries have found regulation can work and that some foreign governments are operating their own games.

``All prohibition does is build up a criminal infrastructure,″ said Schneider, chairwoman of the 55-member Interactive Gaming Council and chief operating officer of Rolling Good Times, an electronic magazine that covers the gaming industry.

``The United States could become the odd man out,″ she said. Supporters of the Kyl provision ``should talk with their colleagues in Australia and New Zealand, who have figured out how to do this,″ she said.

Under the provision, individual gamblers could be imprisoned for 3 months and fined $500. Businesses running gambling sites could be imprisoned for 4 years and fined $20,000 or three times the amount of bets accepted.

The provision would not ban:

_State lotteries and off-track betting on the Internet, as long as the business is on ``closed-loop, subscriber-based″ computer systems inaccessible to the general public.

_Sites for popular sports ``rotisserie″ leagues, in which people choose rosters of professional athletes and bet on their statistics, as long as fees are not used to pay off bets.

Kyl said addictive gambling is a growing problem, adding that experts say youth gambling is rising and could surpass illegal drug use in as little as 10 years.

``Gaming should be a regulated adult recreational activity,″ said Sen. Richard Bryan, D-Nev., a co-sponsor of the amendment. ``It is physically impossible for any state to regulate gaming on the Internet, and the only responsible choice is simply to prohibit it.″

The Senate earlier rejected, 82-18, a move to exempt Indian tribes, which may now run Internet gambling sites. Kyl said that would create a mammoth loophole.

The Justice Department estimates $600 million was bet illegally on sports alone over the Internet last year, a tenfold increase over 1996, said a Kyl aide.

However, the department recently expressed concern about Kyl’s bill, saying it opposes prosecuting bettors and questions the practicality of trying to prosecute foreign-based businesses.